We had our best staying in Tunisia there! First of all is better to know that there are not so much possibilities to stay in Mahdia. Of course I do not speak about Zone Touristice which are starting at 3 km north from Medina and there are a lot of sardinia-boxes there (mass tourism hotels). In mahdia you can choice between Inn El Medina, two flats and one expensive but not characteristic other place. We searched on field for hotels because however I read nice things about Inn El Medina I was afraid about shared bathrooms. Usually doesn't matter for me but now was the first time when we traveled long trip with a small baby. But arriving to this hotel all my fears gone away. It is fantastic because the characteristic and a indescribable charm. Yes, there are shared bathrooms but at every floor and there are only two-three rooms in a floor and bathrooms are permanently cleaned by a lovely lady. The rooms are spacious, some old-fashion furnished and simple. Price was 30 TND / room and we paid other 5 for a heating because was cold there during our staying. It is free wifi which work fine every where. Staff - which is a family - was very friendly and helpful even they don't speak English. If your french is wrong and would asking difficult things just looking evening time to reception when the grandchild is on duty. He speak well English and will help you. Despite of we went to Mahdia only for two days finally we stayed there for-five days. We had a very pleasant stay.
Travelling tips: if you are going from Monastir it is a train (they call it Metro) from Monastir station every 40 minutes. There are no direct trains forward to south! If you are going to south you have to go back to Monastir or Sousse. Another option to take a louage (shared taxi) to El-Jem where is a train station on the main South-North railways. Do not miss the fantastic amphitheater of El-Jem but don't stay there overnight.
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